FACTS ISSUE DECISION

NORBERTO TIBAJIA, JR. and
CARMEN TIBAJIA vs. CA and
EDEN TAN
G.R. No. 100290 June 4, 1993
A deposit made by the Tibajia spouses
in the Regional Trial Court of
Kalookan City in the amount of
P442,750.00 in another case, had been
garnished by the Deputy Sheriff.
The RTC of Pasig rendered its
decision in Civil Case No. 54863 in
favor of the plaintiff Eden Tan,
ordering the Tibajia spouses to pay.
On 14 December 1990, the Tibajia
spouses delivered to Deputy Sheriff
Eduardo Bolima the total money
judgment in the following form:
Whether or not payment by means
of check (even by cashier's check)
is considered payment in legal
tender as required by the Civil
Code, Republic Act No. 529, and
the Central Bank Act.
Petition was denied.
In the recent cases of Philippine Airlines,
Inc. vs. Court of Appeals4 and Roman
Catholic Bishop of Malolos, Inc. vs.
Intermediate Appellate Court,5 this Court
held that —
A check, whether a manager's check or
ordinary check, is not legal tender, and an
offer of a check in payment of a debt is
not a valid tender of payment and may be
refused receipt by the obligee or creditor.
The ruling in these two (2) cases merely
applies the statutory provisions which lay
down the rule that a check is not legal
tender and that a creditor may validly
refuse payment by check, whether it be a
manager's, cashier's or personal check.

Cashier's Check P262,750.00

Cash 135,733.70
————
Total P398,483.70

Private respondent, Eden Tan, refused

to accept the payment made by the
Tibajia spouses and instead insisted
that the garnished funds deposited
with the cashier of the RTC of Pasig,
Metro Manila be withdrawn to satisfy
the judgment obligation.

The provisions of law applicable to the case at bar are the following:

a. Article 1249 of the Civil Code which provides:

Art. 1249. The payment of debts in money shall be made in the currency stipulated, and if it is not
possible to deliver such currency, then in the currency which is legal tender in the Philippines.

The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents
shall produce the effect of payment only when they have been cashed, or when through the fault of the
creditor they have been impaired.

In the meantime, the action derived from the original obligation shall be held in abeyance.;

b. Section 1 of Republic Act No. 529, as amended, which provides:

Sec. 1. Every provision contained in, or made with respect to, any obligation which purports to give the
obligee the right to require payment in gold or in any particular kind of coin or currency other than
Philippine currency or in an amount of money of the Philippines measured thereby, shall be as it is hereby
declared against public policy null and void, and of no effect, and no such provision shall be contained in,
or made with respect to, any obligation thereafter incurred. Every obligation heretofore and hereafter
incurred, whether or not any such provision as to payment is contained therein or made with respect
thereto, shall be discharged upon payment in any coin or currency which at the time of payment is legal
tender for public and private debts.

c. Section 63 of Republic Act No. 265, as amended (Central Bank Act) which provides:

Sec. 63. Legal character — Checks representing deposit money do not have legal tender power and their
acceptance in the payment of debts, both public and private, is at the option of the creditor: Provided,
however, that a check which has been cleared and credited to the account of the creditor shall be
equivalent to a delivery to the creditor of cash in an amount equal to the amount credited to his account.
PIO BARRETTO REALTY DEVELOPMENT Barretto Realty moved for The fact that the check paid
CORPORATION,, Petitioner, v. COURT OF reconsideration alleging that to him by Barretto Realty
APPEALS, JUDGE PERFECTO A. S. LAGUIO, JR., respondent Judge could no was never encashed should
RTC-Branch 18, Manila, and HONOR P. longer grant Moslares' not be invoked against the
MOSLARES, Respondents. motion since the prior sale of latter. Moslares never
subject lots in its favor had questioned the tender done
On 2 October 1984 respondent Honor P. Moslares already been recognized three (3) years earlier.
instituted an action for annulment of sale with damages when the court sheriff was Besides, while delivery of a
before the RTC of Manila against the Testate Estate of directed to deliver, and did incheck produces the effect of
Nicolai Drepin represented by its Judicial fact deliver, the checks it payment only when it is
Administrator Atty. Tomas Trinidad and petitioner Pio issued in payment therefor to encashed, the rule is
Barretto Realty Development Corporation. Moslares and Atty. Trinidad. otherwise if the debtor was
prejudiced by the creditor's
Moslares alleged that the Deed of Sale over four (4) Moslares moved to unreasonable delay in
parcels of land of the Drepin Estate executed in favor reconsider insisting that presentment. Acceptance of a
of the Barretto Realty was null and void on the ground Barretto Realty's payment by check implies an undertaking
that the same parcels of land had already been sold to check was not valid because of due diligence in presenting
him by the deceased Nicolai Drepin. (a) the check was not it for payment. If no such
delivered personally to him presentment was made, the
On 2 May 1986 the parties, to settle the case, executed but to his counsel Atty. Pedro drawer cannot be held liable
a Compromise Agreement which was approved by the Ravelo, (b) the check was not irrespective of loss or injury
court. However, subsequent disagreements arose on encashed hence did not sustained by the payee.
the question of who bought the properties first. produce the effect of Payment will be deemed
payment; and, (c) the check effected and the obligation
It must be noted that the Compromise was not legal tender per for which the check was
Agreement merely gave Moslares and Barretto Realty judicial pronouncements. given as conditional payment
options to buy the disputed lots thus implicitly will be discharged.
recognizing that the one who paid first had priority in
right. Moslares claimed that he bought the lots first on
15 January 1990 by delivering to Atty. Tomas Trinidad
two (2) PBCom checks, one (1) in favor of Barretto
Realty for P3 million, and the other, in favor of the
Drepin Estate for P1.35 million.

But petitioner Barretto Realty denied receiving the

check. Instead, it claimed that it bought the properties
on 7 March 1990 by tendering a Traders Royal Bank
Manager's Check for P1million to Moslares, and a
Far East Bank and Trust Company Cashier's
Check for P1 million and a Traders Royal Bank
Manager's Check for P350,000.00 to Atty. Tomas
Trinidad as Judicial Administrator of the Estate.
However, Moslares and Atty. Trinidad refused to
accept the checks.

Consequently, Barretto Realty filed a motion before

the trial court alleging that it complied with its
monetary obligations under the Compromise
Agreement but that its offers of payment were refused,
and prayed that a writ of execution be issued to compel
Moslares and Atty. Trinidad to comply with
the Compromise Agreement and that the latter be
directed to turn over the owner's duplicate certificates
of title over the lots.

Deputy Sheriff Apolonio L. Golfo implemented the

order by personally delivering the checks issued by
Barretto Realty in favor of Moslares and the Estate to
Atty. Pedro S. Ravelo, counsel for Moslares, and to
Atty. Tomas Trinidad.

More than three (3) years later, Moslares filed

a Motion for Execution alleging that he bought the lots
subject of the Compromise Agreement on 15 January
1990 and that he paid the amounts specified as
payment therefor. He asked that Barretto Realty be
directed to execute a deed of conveyance over subject
lots in his favor. In a Supplement to his motion
Moslares contended that the previous tender of the
checks by Barretto Realty did not produce the
effect of payment because checks, according to
jurisprudence, were not legal tender.
RAYMUNDO A. CRYSTAL, petitioner, vs. Thus, if indeed the check in
COURT OF APPEALS and PELAGIA OCANG, question had been
PACITA, TEODULO, FELICISIMO, PABLO, dishonored, then there can be
LYDIA, DIOSCORA and RODRIGO, all no doubt that petitioner's
surnamed DE GRACIA, respondents. redemption was null and
void. On the other hand, if it
Petitioner's redemption of the property acquired by had only become stale, then it
said respondents in an execution sale pursuant to a becomes imperative that the
final judgment of the trial court in Civil Case No. R- circumstances that caused its
1666, Court of First Instance of Cebu, was invalid non-presentment be
inasmuch as the check which petitioner had used in determined, for if this was
paying the redemption price had been either not due to the fault of the
dishonored or had become stale, hence its value was petitioner, then it would be
never realized. unfair to deprive him of the
rights he had acquired as
Petitioner regained possession of the four (4) parcels of redemptioner, particularly, if,
land in question without the aid of the court, taking the after all, the value of the
same from Pelagia Ocang who had previously taken it check has otherwise been
away from him also extrajudicially, claiming that she received or realized by the
had legally acquired the same precisely in that same party concerned.
execution and that petitioner's redemption, was null
and void because the check he used to pay the When Pelagia Ocang secured
redemption price had been dishonored for lack of the writ of possession in
sufficient funds. question, she had already
been paid the full amount of
the check in dispute. A
compromise had already been
agreed upon by the parties,
although not yet approved by
the court, or, at least, that
Ocang has made admissions
which indicate that the issue
regarding the supposed
dishonoring or becoming
stale of the repeatedly
mentioned check is no longer
of any legal significance.

Case is remanded to the trial

court for further proceedings
SALVACION F. VDA. DE EDUQUE, The present appeal concerns Japanese military notes were
ETC., plaintiff-appellee, the decision of the lower legal tender during the
vs. court regarding the first loan Japanese occupation.
JOSE M. OCAMPO, defendant-appellant. of P40,000, and the principal
error assigned by the Appellant argues, further,
This is an action to compel acceptance of payment of a appellant is that tender of that the consignation of a
mortgage debt. payment by means of a cashier's check, which is not
cashier's check representing legal tender, is not binding
On February 16, 1935, Dr. Jose Eduque secured two Japanese war notes is not upon him---. Upon the
loans from Mariano Ocampo de Leon, Doña valid. contrary, defendant accepted
Escolastica de los Reyes and Don Jose M. Ocampo, the impliedly the consignation of
first in the amount of P40,000 and the second in the the cashier's check when he
sum of P15,000. himself asked the court that
out of the money thus
Plaintiff, as administratrix of the estate of the deceased consigned he be paid the
Dr. Jose Eduque, tendered payment, by means of amount of the second loan of
cashier's check, of the total amount of the two loans, P15,000. It is a rule that " a
P55,000, to defendant-appellant Jose M. Ocampo, one cashier's check may
of the creditors, who refused to accept payment. constitute a sufficient tender
where no objection is made
Defendant only accepted the judgment with respect to on this ground."
the second loan of P15,000.
NEW PACIFIC TIMBER & SUPPLY COMPANY, Petitioner challenged that See. Art 1249 above.
INC., Petitioner, vs. HON. ALBERTO V. SENERIS, there was already a full
RICARDO A. TONG and EX-OFFICIO SHERIFF satisfaction of the judgment Art. 1248. Unless there is an
HAKIM S. ABDULWAHID, Respondents. before the auction sale was express stipulation to that
conducted with the deposit effect, the creditor cannot be
Herein petitioner is the defendant in a complaint for made to the Ex- compelled partially to receive
collection of a sum of money filed by the private Officio Sheriff in the amount the presentations in which the
respondent. On July 19, 1974, a compromise judgment of P63,000.00 consisting of obligation consists. Neither
was rendered by the respondent Judge in accordance P50,000.00 in Cashier's may the debtor be required to
with an amicable settlement entered into by the parties. Check and P13,130.00 in make partial payment.
cash.
For failure of the petitioner to comply with his However, when the debt is in
judgment obligation, the respondent Judge, upon The main issue to be part liquidated and in part
motion of the private respondent, issued an order for resolved in this instance is as unliquidated, the creditor
the issuance of a writ of execution on December 21, to whether or not the private may demand and the debtor
1974. Accordingly, writ of execution was issued for respondent can validly refuse may effect the payment of the
the amount of P63,130.00 pursuant to which, the Ex- acceptance of the payment of former without waiting for
Officio Sheriff levied upon the following personal the judgment obligation the liquidation of the latter.
properties of the petitioner, to wit: (1) Unit American made by the petitioner
Lathe; (1) Unit American Lathe 18 Cracker Wheeler; consisting of P50,000.00 in
(1) Unit Rockford Shaper 24, and set the auction sale Cashier's Check and
thereof on January 15, 1975. P13,130.00 in cash which it The check deposited by the
deposited with the Ex- petitioner in the amount of
However, prior to January 15, 1975, petitioner Officio Sheriff before the P50,000.00 is not an ordinary
deposited with the Clerk of Court the sum of date of the scheduled auction check but a Cashier's Check
P63,130.00 for the payment of the judgment sale. of the Equitable Banking
obligation, consisting of: Corporation, a bank of good
Private respondent claim that standing and reputation. As
1. P50.000.00 in Cashier's Check No. S-314361 dated he has the right to refuse testified to by the Ex-
January 3, 1975 of the Equitable Banking Corporation; payment by means of a Officio Sheriff with whom it
and 2. P13,130.00 in cash. check. has been deposited, it is a
certified crossed check.
Private respondent through counsel, refused to accept
the check as well as the cash deposit. It is a well-known and
accepted practice in the
The Ex-Officio Sheriff proceeded with the auction business sector that a
sale. 6 In the course of the proceedings, Deputy Sheriff Cashier's Check is deemed as
Castro sold the levied properties item by item to the cash.
private respondent as the highest bidder in the amount
of P50,000.00. As a result thereof, the Ex-Officio Moreover, since the said
Sheriff declared a deficiency of P13,130.00. check had been certified by
the drawee bank, by the
certification, the funds
represented by the check are
transferred from the credit of
the maker to that of the payee
or holder, and for all intents
and purposes, the latter
becomes the depositor of the
drawee bank, with rights and
duties of one in such
situation.

Where a check is certified

by the bank on which it is
drawn, the certification is
equivalent to acceptance.

Said certification "implies

that the check is drawn upon
sufficient funds in the hands
of the drawee, that they have
been set apart for its
satisfaction, and that they
shall be so applied whenever
the check is presented for
payment. It is an
 understanding that the check
is good then, and shall
continue good, and this
agreement is as binding on
the bank as its notes in
circulation, a certificate of
deposit payable to the order
of the depositor, or any other
obligation it can assume.

The object of certifying a

check, as regards both
parties, is to enable the
holder to use it as
money." When the holder
procures the check to be
certified, "the check operates
as an assignment of a part of
the funds to the creditors."

Hence, the exception to the

rule enunciated under Section
63 of the Central Bank Act to
the effect "that a check which
has been cleared and credited
to the account of the creditor
shall be equivalent to a
delivery to the creditor in
cash in an amount equal to
the amount credited to his
account" shall apply in this
case.

We see no valid reason for

the private respondent to
have refused acceptance of
the payment of the obligation
in his favor. The auction sale,
therefore, was uncalled for.
Furthermore, it appears that
on January 17, 1975, the
Cashier's Check was even
withdrawn by the petitioner
and replaced with cash in the
corresponding amount of
P50,000.00 on January 27,
1975.
ROMAN CATHOLIC BISHOP OF MALOLOS, Is a finding that private A finding that the private
INC., Petitioner, v. INTERMEDIATE respondent had sufficient respondent had sufficient
APPELLATE COURT, and ROBES-FRANCISCO available funds on or before available funds on or before
REALTY AND DEVELOPMENT the grace period for the the grace period for the
CORPORATION, Respondents. payment of its obligation payment of its obligation
proof that it (private does not constitute proof of
On July 7, 1971, the subject contract over the land in respondent) did tender of tender of payment by the
question was executed between the petitioner as (sic) payment for its said latter for its obligation within
vendor and the private respondent through its then obligation within said the said period.
president, Mr. Carlos F. Robes, as vendee, stipulating period?
for a downpayment of P23,930.00 and the balance of Tender of payment involves
P100,000.00 plus 12% interest per annum to be paid Is an offer of a check a valid a positive and unconditional
within four (4) years from execution of the contract, tender of payment of an act by the obligor of offering
that is, on or before July 7, 1975. The contract likewise obligation under a contract legal tender currency as
provides for cancellation, forfeiture of previous which stipulates that the payment to the obligee for
payments, and reconveyance of the land in question in consideration of the sale is in the former’s obligation and
case the private respondent would fail to complete Philippine Currency? demanding that the latter
payment within the said period. accept the same. Thus, tender
of payment cannot be
presumed by a mere
After the expiration of the stipulated period for inference from surrounding
payment, the Atty. Francisco wrote the petitioner a circumstances.
formal request that her company be allowed to pay the
principal amount of P100,000.00 in three (3) equal At most, sufficiency of
installments of six (6) months each with the first available funds is only
installment and the accrued interest of P24,000.00 to affirmative of the capacity or
be paid immediately upon approval of the said request. ability of the obligor to fulfill
This was denied but a grace period of 5 days was his part of the bargain. But
given. whether or not the obligor
avails himself of such funds
On July 29, 1975, the petitioner, through its counsel, to settle his outstanding
Atty. Carmelo Fernandez, formally denied the said account remains to be proven
request of the private respondent, but granted the latter by independent and credible
a grace period of five (5) days from the receipt of the evidence. Tender of payment
denial 8 to pay the total balance of P124,000.00, presupposes not only that the
otherwise, the provisions of the contract regarding obligor is able, ready, and
cancellation, forfeiture, and reconveyance would be willing, but more so, in the
implemented. act of performing his
obligation.

The crux of the instant controversy lies in the 2nd Issue:

compliance or non-compliance by the private
respondent with the provision for payment to the Certified personal check
petitioner of the principal balance of P100,000.00 and which is not legal tender nor
the accrued interest of P24,000.00 within the grace the currency stipulated, and
period. therefore, cannot constitute
valid tender of payment. The
first paragraph of Art. 1249
of the Civil Code provides
that "the payment of debts in
money shall be made in the
currency stipulated, and if it
is not possible to deliver such
currency, then in the currency
which is legal tender in the
Philippines.

Philippine Airlines v. Court

of Appeals, 24 G.R. No.
49188,aw library

Since a negotiable instrument

is only a substitute for money
and not money, the delivery
of such an instrument does
not, by itself, operate as
payment. A check, whether a
manager’s check or ordinary
check, is not legal tender, and
an offer of a check in
payment of a debt is not a
valid tender of payment and
may be refused receipt by the
obligee or creditor.